Imperial Oil Limited

Good day and thank you for standing by. Welcome to the Imperial Q2 2021 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. I would like to turn the conference over to your host, Mr. Dave Hughes, Vice President of Investor Relations. Please go ahead.

Thank you, Grace, and good morning, everybody. Thanks for joining us on our second quarter earnings call. I'm here today with Brad Corson, Chairman, President, and CEO, and as usual with Brad is the Senior Management Team, Dan Lyons, Senior Vice President of Finance and Administration, Simon Younger, Senior Vice President of the Upstream, John Wetmore, Vice President of the Downstream, and Sherry Evers, Vice President of Commercial and Corporate Development. First thing I need to do is read the cautionary statement. Today's comments include reference to non-GAAP financial measures. The definitions and reconciliations of these measures can be found in Attachment 6 of our most recent press release and available on our website with the link conference call. Today's comments may also contain forward-looking information. Any forward-looking information is not a guarantee of future performance and actual future financial and operating results can differ materially depending on a number of factors and assumptions. Forward-looking information and the risk factors and assumptions are described in further detail in our second quarter earnings press release that we issued earlier this morning, as well as our most recent Form 10-K, and all of those documents are available on CDER, EDGAR, and on our website, so I would ask you to please refer to those. So we're following our usual format today. Brad's going to start out offering some opening remarks, and then Dan's going to provide a financial update, and then we'll go back to Brad for operational update, following which we'll go into the Q&A session. So with that, I'll turn it over to Brad.

Thank you, Dave. And good morning, everybody. And welcome to our second quarter 2021 earnings call. I hope each of you and your families are doing well and continuing to stay healthy. You know, it's great to see the high levels of both first and second vaccinations we are achieving here in Canada and the significant reduction in case counts across the country. And hopefully this is bringing some sense of normalcy back to all of our lives, which is desperately needed. However, We do recognize we're not out of the woods yet, given what we are seeing globally and here in Canada with respect to the variants. Think about how to best characterize the second quarter. First, on the market side, we saw another quarter of increasing commodity prices, but with continued slow recovery in demands. And from an operational perspective, we continue to deliver very strong performance. As we talked about on our first quarter call, we had plans to execute a significant amount of maintenance this quarter. And I'm pleased to say this maintenance was executed successfully. And now that most of our scheduled downtime is behind us, we are in great shape heading into the second half of the year. This is especially exciting as we've seen many of the pandemic-related restrictions in Canada lifted, and are looking forward to seeing a more pronounced recovery in demands. So I'm very pleased with the strong execution of our plans and the subsequent results this quarter. And likewise, I'm very excited about the momentum we're now carrying into the second half of the year. And over the next few minutes, Dan and I will detail the results of what was a very strong second quarter for us. So now let's turn more specifically to those second quarter results. Earnings for the quarter were $366 million, and our cash from operating activities was $852 million, both down slightly from the first quarter, but very much as expected, given our turnaround activities. We saw improvements in crude prices through the quarter, although our ability to fully capture this improved market environment was impacted by the high level of turnaround activities that I mentioned. We've delivered a strong first half in 2021, underpinned by the actions we took last year and are building on this year to maximize the value of our existing assets. And not only was our operating cash flow in the quarter higher than in the second quarter of 2020, it was actually higher than all four quarters of 2020 combined. Our upstream continues to perform very well. and I will talk more about each asset in a few minutes, but I want to take just a moment now to highlight a major milestone we have achieved at Curl. I'm excited to let you know that we are implementing a new strategy this year to extend intervals between turnarounds at Curl. Consequently, we will only have a single annual turnaround starting this year, which we just completed, instead of the two we have typically had in the past. So the CURL turnaround that was originally planned for September, October this year has now been canceled. And while we have been talking for some time about our intention to make this change, I'm pleased to say we are delivering this a year ahead of schedule. And this is due to the progress we have made on our multi-year reliability improvement plans, and specifically the work we've been doing to prepare for this capability over the last several years. Curl's demonstrated performance gives us the confidence to accelerate our plans. And it's this type of performance that underpins our strong cash flow generation, which in turn supports our focus on shareholder returns. During the second quarter of 2021, Imperial returned over $1.3 billion to shareholders through share repurchases and dividend payments. This compares to just over $900 million for all of 2020. And in June, the company announced the renewal of its share repurchase program, allowing us to repurchase up to 5% of our outstanding shares over a 12-month period ending on June 28, 2022. I would also like to briefly highlight the launch of the Oil Sands Pathways to Net Zero Alliance. Imperial is very proud to be one of the five founding members of the alliance, which combined to account for around 90% of Canada's oil sands production. As a group, we are committed to working together, along with our federal and provincial government counterparts, with a goal to achieve net zero greenhouse gas emissions from oil sands operations by 2050. This level of emissions reduction is clearly a significant task we have facing us. And we are looking forward to working together with our industry and government partners to overcome this challenge. It's also a further example of why Canada continues to be the best place globally to produce oil. As we have talked about in the past, Canada continues to lead all major reserve holders in all three aspects of E, S, and G, environmental, social, and governance. This unprecedented alliance serves to further underscore how important Canada is as a producing nation and the role we play on the global stage. The first phase of this foundational project, a major carbon capture utilization, and storage trunk line connected to a carbon sequestration hub, which will enable multi-sector tie-in projects for expanded emissions reductions. And this is only the start, and we believe that through collaboration, Canada has what it takes to be the responsible energy provider to the world. And with that, I'll now turn it over to Dan to go through our financial performance for the quarter in more detail. Thanks, Brad.